At the 1992 Earth Summit, eco-efficiency was endorsed as a new business concept and means for companies to implement Agenda 21 in the private sector.
In the early 1970s Paul R. Ehrlich and John Holdren developed the lettering formula I = PAT to describe the impact of human activity on the environment.
[4] Furthermore, the concept of eco-efficiency was first described by McIntyre and Thornton in 1978,[5] but it wasn't until 1992, when the term was formally coined and widely publicized by Stephan Schmidheiny in Changing Course.
Eco-efficiency is routinely a concept used because it combines performance along two of the three axes of sustainable development,[4] making it easier for academics and leading thinkers to tease out the associated social issues.
[6] Furthermore, eco-efficiency can adapt and flex to be fit different sizes of companies, while also maintaining relevance with the larger scale of government and national policies.
[6] For example, larger national players such as the Organisation for Economic Co-operation and Development (OECD 2002), European Commission (EU 2005), European Environment Agency (EEA) and the National Round Table on the Environment and the Economy (NRTEE) have all recognized that eco-efficiency is a practical approach that businesses should adopt in setting and achieving their environmental performance objectives.
[2][6][8][13][14] It has been proven to heighten market values for firms,[7][15] serve as an effective management tool for governments, benefit civil society, and increase quality of life.
Eco-efficiency is also implemented in more non-traditional ways, such as the integration of environmental criteria into the credit approval process; looking at "eco-integrated economic risks of a customer".